Corporate sustainability is undergoing a fundamental shift; for an indication of just how far it has come, look no further than SAP. The enterprise software giant has added environmental metricsto many of its core offerings, allowing information about environmental impacts to be seamlessly incorporated into everything from executive management to operations. It indicates that sustainability is starting to be internalized by at least some of SAP’s customers, which include many of the largest companies in the world.
The size, scope and sophistication of corporate environmental data has exploded in recent years, as recognition of potential savings through efficiency along with the pressure for disclosure have intensified the need for large companies to understand more about their operations. This will only increase as “smart” technologies become more prevalent and everyday objects create their own piles of data. The challenge is managing and drawing meaning from billions of data streams in order to understand it, apply it and make more informed decisions with it.
SAP is not the only example of a company seeing an opportunity here. Established players and startups alike are creating tools that help companies incorporate sustainability information into business decisions in areas such as facility operations, product design and supply chain management. These tools provide the information and analysis necessary to enable sustainability considerations to be integrated across an organization. But sometimes lost in the excitement surrounding new technological innovations is the need to put supporting structures, processes and culture in place to maximize the benefit of these tools.
Data in operations
The facility and process operation space has really heated up over the past few years, with a host of tools emerging from software companies. In just the past 6 months, IBM acquired TRIRIGA to build out its Smarter Buildings platform, HP partnered with Hara to strengthen its Energy and Sustainability Management suite, and C3 emerged from stealth mode to unveil its products and list of pilot customers. Tools from these companies all help facilities managers monitor building energy and carbon performance by comparing performance to benchmarks. Whether it’s matching a facility up against historical performance, operational targets or other buildings in a portfolio, these tools help facilities managers see if buildings are performing as expected and make more informed decisions about building operation or additional investment.
There’s a lot at stake for companies that can get this right. According to the SMART 2020 report from the Climate Group and GeSI, greater integration of IT into building design and operation could result in a 15% reduction in building-related carbon emissions and energy savings of $295 billion per year. While building systems automation is an important piece of the puzzle, these data collection and software tools will have the greatest impact when the right organizational and incentive structures are in place to help decision makers choose the smartest investments to optimize their environmental footprint and operating costs.
Data in design
Product design presents another area of opportunity for software tools that help with environmental data-enabled decision making. Take Autodesk, which added the Eco Materials Advisor (EMA) tool to its industry standard design software earlier this year. Using material life cycle impact data – energy, water, and CO2 impact – from a Granta Design database, the tool calculates and displays the environmental impact of a given product design, allowing users to experiment with different materials and configurations before the first prototype is even built.
To support the type of design tools that incorporates environmental data from the beginning, companies like Nike, with its Considered Index, are leading the way with processes that systematically encourage or even mandate the reduction of product environmental footprints. This type of strategic focus on impact reduction, enabled by new data-enabled design tools, is quickly taking sustainable design into the mainstream.
Data in supply chain
Finally, supply chain management has received a lot of attention in recent years thanks to the efforts of retailers like Walmart andlarge brand owners like P&G to regularly collect data on supplier environmental performance. While the focus to date has primarily been on data collection and not decision-making, this information will eventually be put to use by those who are invested in collecting it.
In the meantime, a startup called Sourcemap has developed a platform for companies, organizations, and experts to contribute to crowdsourced product supply chains and carbon footprints. Their long-term vision is to “offer information on the source and the impact of all products and services so that everyone can make sustainable choices.”
Growing mounds of data on lifecycle product impacts have the potential to affect how companies, and ultimately even consumers, decide what to buy and from whom. This could have profound implications for consumer brands and B2B companies alike. New software solutions making environmental impact data accessible to procurement decision-makers have an important role to play. But equally important will be the organizational structures and processes that companies put in place to ensure that sustainability needs from various parts of the organization are reflected in procurement decisions.
In the emergence of these software tools for integrating sustainability-related data into business processes, we see new growth of the corporate sustainability field itself – an evolution from its foundations of environmental health & safety and green marketing to a new level of influence on core business decisions related to operations, finance and corporate strategy. For leaders, sustainability goes beyond the values of the organization to create real business value in operations, product design, supply chain management and beyond.
We are in a new phase of corporate sustainability. While data are essential to making the right decisions, new software tools are not substitutes for effective strategy, organizational structures, processes, and employee education. When these two pieces – the technological and the cultural – are combined, however, green business will truly be business as usual.